Xi made clear in the call he was asking both sides to scale down the rhetoric and stressed the importance of diplomacy, China's Foreign Ministry said in a statement.
"At present, relevant parties should exercise restraint and avoid words and actions that would escalate tensions on the Korean Peninsula," Xi said, according to the statement.
Saber-rattling from the pariah state has dominated Trump's 17-day working vacation in New Jersey.
Tensions came to a boil on Tuesday when Trump appeared to threaten nuclear war on North Korea, saying he would unleash "fire and fury like the world has never seen" if Pyongyang continued to threaten the US or its allies.
He made his comments after US intelligence analysts assessed that North Korea had produced a miniaturized nuclear warhead. Pyongyang also tested its first two known intercontinental ballistic missiles last month, bringing it a step closer to being able to carry out a nuclear strike on the US mainland.
Military solutions 'locked and loaded'
Those comments came after Pyongyang announced a plan to strike the waters off the US Pacific territory of Guam with ballistic missiles.
Trump also said Friday that North Korean leader Kim Jong Un "will truly regret it and he will regret it fast" if he issued an overt threat or attacks Guam or a US ally.
But he also said he wanted a peaceful solution to the problem.
"Nobody loves a peaceful solution better than President Trump, that I can tell you," he said, referring to himself in the third person.
But he also warned that "we also could have a bad solution."
When asked if that bad solution meant war, Trump responded: "I think you know that answer to that," he said.
Some countries have sounded the alarm over the provocative exchange and have, like China, called for calm. Others have backed Trump and his tough stance.
German Chancellor Angela Merkel described the escalation as "the wrong answer" while Russian Foreign Minister Sergey Lavrov said it was "very worrying."
Foreign policy and national security experts have also raised questions about Trump's response to North Korea -- unprecedented for a US President -- noting that past administrations have shied away from such comments to avoid adding to North Korea's credibility.
But the UK's ambassador to the UN Matthew Rycroft appeared to back Trump's initial "fire and fury" comments when asked about them, reiterating that the UK "stands shoulder to shoulder" with the US on the issue.
Washington has put continual pressure on China to use its influence on North Korea to persuade the state to end its provocations.
China is North Korea's biggest trading partner and main supplier of energy.
But China voted in favor of new US sanctions on North Korea last weekend and says it is in line with the diplomatic community in wanting to see the Korean peninsula denuclearized.
The White House confirmed that Trump talked to Xi and said both leaders agreed North Korea must stop its provocative behavior.
"The leaders affirmed that the recent adoption of a new United Nations Security Council resolution regarding North Korea was an important and necessary step toward achieving peace and stability on the Korean Peninsula," the White House said in a